Crude oil prices have dropped below $56 a barrel after an industry report indicated a huge increase in US inventories.

Brent crude LCOc1 slipped by 29 cents to reach $55.63 a barrel while US crude CLc1 plummeted by 40 cents to touch $52.74, reported Reuters.

American Petroleum Institute (API) report stated the crude inventories in the US grew by 11.6 million barrels last week.

Investors are awaiting the official data to be released by US Energy Information Administration.

If the EIA official data confirms the API report, then it would be the ninth consecutive rise of US stocks.

US production continued to increase ever since the OPEC countries decided to curb oil-output to eliminate global oil oversupply.

"EIA revised its forecast, stating that US crude production is likely to rise by 330,000bpd."

EIA revised its forecast, stating that US crude production is likely to rise by 330,000bpd, a substantial increase from its previous prediction.

According to Reuters, the US interest rate may increase next week, another deterrent for oil prices.

The OPEC countries were successful in cutting production by more than 1.5 million bpd against the pledged reduction of 1.8 million bpd.

The group has yet to decide whether to extend the output cut deal, which is scheduled to end in June.